Italy defies the EU and stick to its budget plans

Despite pressure from the European Commission, which rejected Rome’s budget outright last month in a first for the EU, Italian Deputy Prime Minister Luigi Di Maio vowed to stand firm on the country’s anti-austerity plans.

France24 reports that “the budget will not change, neither in its balance sheet nor in its growth forecast. We have the conviction that this is the budget needed for the country to get going again,” Di Maio, who leads the anti-establishment Five Star Movement (M5S), said Tuesday evening after a ministerial meeting.

M5S and its coalition partner, the far-right League party, insist the budget will help kickstart growth in the eurozone’s third largest economy and reduce the public debt and deficit.

The Commission gave Italy until Tuesday to make changes to its 2019 plans and warned non-compliance could activate the “excessive deficit procedure” (EDP), a complicated process that could lead to fines and possibly provoke a strong, adverse market reaction.

Italy intends to run a public deficit of 2.4 percent of gross domestic product in 2019 — three times the target of the government’s centre-left predecessor — and one of 2.1 percent in 2020.